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<Research>CICC: Short-term Capital Overhang to Reverse; Valuation Recovery Expected for CN Insurers; CPIC, PING AN Recommended
Since April, share prices of Chinese insurers have not followed the broader market rebound, CICC said in its report. Recent roadshows provided greater insights that the short-term ...
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<Research>CICC: Short-term Capital Overhang to Reverse; Valuation Recovery Expected for CN Insurers; CPIC, PING AN Recommended
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Since April, share prices of Chinese insurers have not followed the broader market rebound, CICC said in its report. Recent roadshows provided greater insights that the short-term capital overhang may reverse as extremes lead to reversal, and the sector is poised for valuation recovery.

CICC favored quality companies and recommended CPIC (02601.HK)  -0.380 (-1.162%)    Short selling $124.36M; Ratio 29.905%   , PING AN (02318.HK)  -0.250 (-0.407%)    Short selling $463.54M; Ratio 27.261%   , CHINA TAIPING (00966.HK)  -0.460 (-2.154%)    Short selling $24.49M; Ratio 10.566%   , CHINA LIFE (02628.HK)  -0.500 (-1.688%)    Short selling $1.11B; Ratio 39.740%   and PICC P&C (02328.HK)  -0.480 (-3.073%)    Short selling $187.31M; Ratio 22.825%   . Please refer to a separate table for target prices.

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Regarding the persistent decline in insurance stocks, CICC noted that recent market style has been relatively extreme. Compared with sectors such as technology, insurance lacks attractiveness, leading to capital outflows from funds pursuing short-term relative returns.

In addition, continued shareholding reductions by long-term shareholders such as China Securities Finance and related asset management plans in A-share insurers exerted capital pressure.

The report stated that the sector requires a long-term recovery logic rather than merely trading-driven elasticity. Over the past two years, sector share prices were dramatically influenced by equity market return expectations in the short term. An important reason is low valuations and substantial room for upward earnings revisions in both the equity market and insurance sector.

The broker had believed at end-2025 that the sector would shift toward valuation recovery, but the rapid rally in early 2026 was again driven by expectations of strong equity market growth. The recent lag in insurance stocks suggested the market is becoming concerned that after a higher earnings base, upside elasticity weakens, and volatile earnings cannot support high valuations.

The sector needs a more stable and long-term logic. Interest rates, liability costs and expansion pace are core factors affecting long-term value of life insurers. After considering costs, the pace of liability expansion is the key support for high valuations.
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-05-20 16:25.)

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